Will Starlink Replace Your Phone Company? Verizon's Worst Day Since 2002

By Derek Whitaker, Founder, Blu Sky Factory · Updated 27 October 2026

The short answer

Not in Australia yet, but the direction is clear. In October 2026 SpaceX agreed to buy a block of US mobile spectrum that lets Starlink reach ordinary phones inside buildings, and Wall Street repriced America's phone companies overnight. For Australians the questions are what it means for Telstra and Optus, for the super funds that hold them, and for an NBN that still leaves city businesses on copper. For investors it was also a lesson in why a stop-loss can't protect a share that gaps.

Every so often a single announcement tells you where an entire industry is heading. This was one of them. SpaceX agreed to buy the airwaves it needs to put Starlink into ordinary phones, and by the end of the next trading day America's three big phone companies had lost billions in market value.

Travis Carter and I spent this week's Greater Wealth on what that means here: for Telstra and Optus, for the super funds that hold them, and for an NBN that still has our own studio on copper.

The Greater Wealth with Derek Whitaker and Travis Carter, Edge Radio Australia. Also on Rumble, Spotify and all podcast apps.

What actually happened

Why the 800 megahertz band matters

Starlink's weakness on phones has always been getting a signal indoors. As I explained on the show, "the lower band 800 megahertz spectrum can travel further and penetrate walls or structures more effectively." And the clever part is that "existing devices already support 800 megahertz allowing customers to use Starlink Mobile without buying a new phone."

That's what spooked Wall Street. Nothing changed inside Verizon, AT&T or T-Mobile that day. What changed was what investors expect those companies to be worth in five years, when a satellite network that covers the whole planet can also reach the phone already in your pocket.

What it means for Australia

Travis put the Australian question better than I could. Starlink already works here and works well, but "the only thing I don't like about it in Australia, it is actually still, to this day, more expensive than a standard internet connection. If what Elon is doing and everything else that's going on, if they can just drop that price to something that's comparable, I think Telstra and Optus are in major trouble."

And that matters well beyond the telcos, because, as Travis said, "there's a lot of superannuation funds that are heavily invested in companies like Telstra, like Optus." Many Australians hold these "safe" dividend companies through their super without ever choosing to. My answer on the show was simple: "Technology tends to get cheaper as we go along."

Then there's the NBN. Travis described Edge Radio's own studio: "We're in the heart of the city here. We still have copper to the node. And we can't get it upgraded." For a business that lives on communicating with the rest of the world, a reasonably priced Starlink is a genuine option. That's a problem for any network that relies on customers having no alternative.

Who holds the data

There's a bigger question underneath all of this. Starlink isn't just a telco. Elon's companies now span cars that collect data, satellite internet, X (which he's building into a place for payments), robots, tunnels and rockets. Once your phone connection runs through the same network, the amount of information sitting with one organisation is, as we said on the show, "extraordinary. So it puts incredible power within that organisation."

That isn't a reason to panic. It's a reason to understand who owns the infrastructure your life and your business now run on.

The selloff, and why a stop-loss didn't help

This is the part of the story that matters most to anyone holding shares. When Verizon fell, it didn't slide. It opened far below where it closed the night before, a gap traders call slippage. The big selling happened before the market opened to ordinary investors.

On the show I put it plainly: a lot of people rely on stop-losses and trailing stops, and "in that situation, that scenario, it won't help them at all. And it can absolutely gap." A stop-loss can only sell at a price the market actually trades at. If the share opens 9% lower, that's where the order fills.

That's why experienced traders often use options instead: contracts that fix a price in advance, so a gap doesn't decide the outcome for them. And as I said on air, "Wall Street being Wall Street always overreacts to things, whether it be on the upside or the downside." Traders who understand volatility plan for that overreaction rather than fearing it.

This is general education, not financial advice. Nothing here is a recommendation to buy or sell any stock.

Why didn't gold go up?

Travis spotted something odd while we were on air. "Every time there's massive turmoil on the markets, people generally flee to the metals," he said, but "even silver, gold, and platinum is also down on these figures."

The answer is that a selloff in one sector isn't a panic across the whole market, and precious metals have their own drivers: physical demand for silver from manufacturing, metal moved to the United States ahead of feared tariffs, and price gaps between New York and London. Assuming gold always rises when shares fall is exactly the kind of rule of thumb that lets investors down.

The bigger picture

None of this happens overnight, even when the share price moves overnight. As I said to close the show, "It seems incremental. But when you actually pull out and look at it, it's happening so fast because the technology is moving so quickly and the legislation is following."

Your questions, answered

Starlink and your phone

Will Starlink replace my phone company?

Not yet, and not in Australia. In October 2026 SpaceX agreed to buy US mobile spectrum that lets Starlink reach phones inside buildings, which is why investors repriced the US phone companies. In Australia the bigger questions are price and regulation: Starlink internet still costs more than a standard connection here.

Can I get Starlink on my phone in Australia?

Partly. Telstra customers can already send text messages via Starlink satellites from most outdoor areas, through Telstra Satellite Messaging, launched in June 2025. It's text only: no voice calls or mobile data yet, and it isn't meant for emergencies.

Will I need a new phone for Starlink Mobile?

Probably not. The 800 MHz band SpaceX is buying is one most existing phones already support, which is a large part of why the deal mattered. As Derek said on the show, "existing devices already support 800 megahertz allowing customers to use Starlink Mobile without buying a new phone."

Why does the 800 MHz band matter?

Lower frequencies travel further and pass through walls and buildings better than the higher frequencies Starlink uses for its dishes. Indoor coverage has been the main gap in satellite-to-phone services.

Starlink, the NBN and Telstra

Is Starlink better than the NBN?

It depends on where you are and what you can get. Starlink is wireless and portable, and for many regional homes and for businesses stuck on old copper connections it can be faster and more reliable. In the city it usually still costs more than a standard NBN plan.

What does Starlink mean for Telstra and Optus?

If Starlink's price ever matches a standard connection, the incumbents face real competition for the first time in years. As Travis Carter put it on the show: "if they can just drop that price to something that's comparable, I think Telstra and Optus are in major trouble."

Is my superannuation exposed to Starlink?

Indirectly, it may be. Many Australian super funds hold telecommunications companies such as Telstra for their dividends. A competitor that changes the industry's economics changes what those shares are worth. Check what your fund actually holds. (General education only, not financial advice.)

The share market

Why did Verizon stock fall?

Because investors suddenly priced in a powerful new competitor. After SpaceX's spectrum deal, Verizon's shares fell 8.75% on 9 October 2026, their worst day since 2002. T-Mobile fell about 13% and AT&T roughly 10%. Nothing inside the companies changed that day; expectations for the next five years did.

Does a stop-loss protect you when a share gaps down?

No. A stop-loss becomes an order to sell at the next available price, and if a share opens far below the previous close, that's the price it fills at. Gaps often follow announcements made outside market hours, which is exactly when ordinary investors can't act.

What do traders use instead of a stop-loss?

Many use options: contracts that fix a price in advance, so a gap doesn't decide the outcome. Options carry their own risks and costs, which is why they're worth learning properly before using. (General education only, not financial advice.)

Why didn't gold go up when the market fell?

Because one sector selling off isn't a panic across the whole market, and precious metals have their own drivers, such as industrial demand for silver and metal moving between New York and London. As Travis noticed on air, "even silver, gold, and platinum is also down on these figures."

Learning more

Where can Australians learn how traders handle volatile markets?

Blu Sky Factory, an Australian education company founded by Derek Whitaker, runs a free masterclass called Options Trading in a Falling Market, at bluskyfactory.com/volatile-markets: the ten things Derek wishes he'd known before his first options trade, and how traders plan for markets that move fast in either direction. Education only, not financial advice.

Three questions to ask this week

Which of my investments, including what my super fund holds, depend on a business that a new technology could undercut?
What would my business do with a fast, reliable connection that didn't depend on the NBN?
If a share I own opened 10% lower tomorrow, what would actually happen to my position?

If the third question made you uneasy, that's the gap a stop-loss can't cover. The free masterclass walks through how traders think about it.

Sources

Education only. Nothing here is personal financial, tax or legal advice.